The Earned Income Tax Credit (EITC): An
Overview
Gene Falk
Specialist in Social Policy
Margot L. Crandall-Hollick
Analyst in Public Finance
December 3, 2014
Congressional Research Service
7-5700
www.crs.gov
R43805
The Earned Income Tax Credit (EITC): An Overview
Summary
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers
earning relatively low wages. Because the credit is refundable, an EITC recipient need not owe
taxes to receive the benefit. Eligibility for and the amount of the EITC are based on a variety of
factors, including residence and taxpayer ID requirements, the presence of qualifying children,
age requirements for childless recipients, and the recipient’s investment income and earned
income. Tax filers with income above certain thresholds—these thresholds are based on marital
status and number of qualifying children—are ineligible for the credit.
The EITC varies based on a recipient’s earnings. Specifically, the EITC equals a fixed percentage
(the “credit rate”) of earned income until the credit amount reaches its maximum level. The EITC
then remains at its maximum level over a subsequent range of earned income, between the
“earned income amount” and the “phase-out amount threshold.” Finally, the credit gradually
decreases to zero at a fixed rate (the “phase-out rate”) for each additional dollar of adjusted gross
income (AGI) (or earnings, whichever is greater) above the phase-out amount threshold. The
specific values of these EITC parameters (e.g., credit rate, earned income amount) vary
depending on several factors, including the number of qualifying children a tax filer has and his
or her marital status. For 2014, the maximum EITC for a tax filer without children is $496 per
year. In contrast, the 2014 maximum EITC for a tax filer with one child is $3,305 per year; for
two children, $5,460 per year; and for three or more children, $6,143 per year.
The EITC is provided to individuals and families once a year, in a lump sum payment after
individuals and families file their federal income tax return. The credit may be received in one of
three ways: (1) a reduction in federal tax liability; (2) a refund from the Treasury if the tax filer
has no income tax liability; or (3) a combination of a reduced federal tax liability and a refund.
The amount of the credit a tax filer receives is based on the prior year’s income, earnings, and
family composition (marital status and number of qualifying children). That is, the EITC paid in
2015 will be based on factors from 2014.
The EITC cannot be counted as income in determining eligibility for or the amount of any
federally funded public benefit program. An EITC refund that is saved by a tax filer does not
count against the resource limits of any federally funded public benefit program for 12
months after the refund is received.
In 2012, a total of $64.1 billion was claimed by 27.8 million tax filers (19% of all tax filers),
making the EITC the largest need-tested anti-poverty cash assistance program. In that year, 97%
of all EITC dollars were claimed by families with children. However, there was considerable
variation in the share of returns claiming the EITC by state, with a greater share filed in certain
southern states compared to other regions of the country.
Congressional Research Service
The Earned Income Tax Credit (EITC): An Overview
Contents
Introduction ...................................................................................................................................... 1
Eligibility for the EITC .................................................................................................................... 1
Filing a Federal Income Tax Return .......................................................................................... 2
Earned Income ........................................................................................................................... 2
Residency and Identification Requirements .............................................................................. 3
Qualifying Children ................................................................................................................... 3
Age Requirements for EITC Recipients with No Qualifying Children ..................................... 4
Investment Income .................................................................................................................... 4
Disallowance of the EITC Due to Fraud or Reckless Disregard of Rules ................................. 4
Calculating the EITC ....................................................................................................................... 4
Income Limits for the EITC ...................................................................................................... 7
Payment of the EITC ....................................................................................................................... 8
Interaction with Other Tax Provisions ....................................................................................... 9
Treatment of the EITC for Need-Tested Benefit Programs ..................................................... 10
Modifications to the EITC Set to Expire ....................................................................................... 10
Participation and Benefits .............................................................................................................. 11
Trends in Participation and EITC Benefits .............................................................................. 11
Participation and EITC Amounts Claimed for 2012................................................................ 13
Number of Qualifying Children ........................................................................................ 14
Income Level ..................................................................................................................... 16
Filing and Marital Status ................................................................................................... 17
Region ............................................................................................................................... 18
Figures
Figure 1. Maximum EITC by Number of Qualifying Children: 2014 ............................................. 5
Figure 2. Amount of the EITC for an Unmarried Tax Filer with One Child, 2014 ......................... 7
Figure 3. Number of Tax Filers Claiming the EITC: 1975 to 2012 ............................................... 12
Figure 4. EITC Claimed on Federal Income Tax Returns: 1975-2012 .......................................... 12
Figure 5. Average EITC Claimed: 1975 to 2012 ........................................................................... 13
Figure 6. Total EITC Dollars Claimed for 2012, by Number of Qualifying Children................... 14
Figure 7. Number of Tax Returns with EITC Claims for 2012, by Number of Qualifying
Children ...................................................................................................................................... 15
Figure 8. Average EITC Claimed by Tax Filers in 2012, by Number of Qualifying
Children ...................................................................................................................................... 15
Figure 9. Number of Returns Claiming the EITC and Average EITC Claimed for 2012, by
Adjusted Gross Income .............................................................................................................. 17
Figure 10. Estimate of EITC Dollars Claimed by Marital Status, 2015 ........................................ 18
Figure 11. Percentage of Tax Returns Claiming the EITC by State, 2012 ..................................... 19
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The Earned Income Tax Credit (EITC): An Overview
Tables
Table 1. EITC Tax Parameters by Marital Status and Number of Qualifying Children for
2014 .............................................................................................................................................. 5
Table 2. Maximum AGI to Qualify for the EITC, by Number of Qualifying Children and
Filing Status in 2014 ..................................................................................................................... 8
Table A-1. EITC Tax Filers and Dollars Claimed: 1975-2012 ...................................................... 20
Table A-2. Average EITC, Number of Returns with EITC Claimed, and Total EITC
Benefits for 2012, by Adjusted Gross Income ............................................................................ 21
Table A-3. Total EITC Returns and Amounts for 2012, by State ................................................... 23
Appendixes
Appendix. Additional Tables ......................................................................................................... 20
Contacts
Author Contact Information........................................................................................................... 24
Acknowledgments ......................................................................................................................... 24
Congressional Research Service
The Earned Income Tax Credit (EITC): An Overview
Introduction
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers with
relatively low earnings. Because the credit is refundable, an EITC recipient need not owe taxes to
receive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRC)
and administered as part of the federal income tax system. In 2012, a total of $64.1 billion was
claimed by 27.8 million tax filers, making the EITC the largest need-tested anti-poverty cash
assistance program.
Under current law, the EITC is calculated based on a recipient’s earned income, using one of
eight different formulas, which vary depending on several factors, including the number of
qualifying children a tax filer has (zero, one, two, or three or more) and his or her marital status
(unmarried or married). All else being equal, the amount of the credit tends to increase with the
number of eligible children the EITC claimant has. Indeed, most of the benefits of the EITC—
97% of EITC dollars in 2012—go to families with children.
This report provides an overview of the EITC, first discussing eligibility requirements for the
credit, followed by how the credit is computed and paid. The report then provides data on the
growth of the EITC since it was first enacted in 1975. Finally the report concludes with data on
the EITC claimed on 2012 tax returns, examining EITC claims by number of qualifying children,
income level, tax filing status, and location of residence. For a discussion of legislation
introduced in the 113th Congress to change the EITC, see CRS Report R43763, The Earned
Income Tax Credit (EITC): Legislation in the 113th Congress, by Margot L. Crandall-Hollick.
Eligibility for the EITC
A tax filer must fulfill the following requirements to claim the EITC:
1. The tax filer must file a federal income tax return.1
2. The tax filer must have earned income.
3. The tax filer must meet certain residency and identification requirements.
4. The tax filer’s children must meet relationship, residency, and age requirements
to be considered qualifying children for the credit.
5. Childless workers who claim the credit must be between ages 25 and 64. (This
age requirement does not apply to EITC claimants with qualifying children.)
6. The tax filer’s investment income must be below a certain amount.
7. The tax filer must not be disallowed the credit due to prior fraud or reckless
disregard of the rules when they previously claimed the EITC.
Additionally, a tax filer with income above a certain dollar amount (labelled as “income where
credit=0” in Table 1) will be ineligible for the credit. Given that this income level is dependent on
1 A tax filer who is claimed as a dependent on another person’s tax return is ineligible for the EITC.
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The Earned Income Tax Credit (EITC): An Overview
the number of qualifying children and marital status of the tax filer, this requirement is discussed
in greater detail in the section of the report entitled “Calculating the EITC.”
Requirements (1) through (7) are discussed in detail below.
Filing a Federal Income Tax Return
To be eligible for the EITC, a person must file a federal income tax return. Those who do not file
a federal income tax return cannot receive the EITC.
The EITC can be claimed by taxpayers filing their tax return as married filing jointly, head of
household, or single.2 Tax filers cannot claim the EITC if they use the filing status of married
filing separately. If the tax filer has a qualifying child, the tax filer must include the child’s name
and Social Security number on a separate schedule (Schedule EIC) filed with the federal tax
return.3
Earned Income
A tax filer must have earned income to claim the EITC. Earned income for the EITC is defined as
wages, tips, and other compensation included in gross income. It also includes net self-
employment income (self-employment income after deduction of one-half of Social Security
payroll taxes paid by a self-employed individual).
In addition, servicemembers may elect to include combat pay in their earnings when calculating
the EITC. All income earned by a member of the Armed Forces while in a designated combat
zone is considered combat pay and is normally not included in taxable income. However, a tax
filer may elect to include combat pay as earnings for the purpose of calculating the EITC.4
Generally, servicemembers will make this election if it results in a larger credit. (Using combat
pay to calculate the EITC does not make the combat pay taxable income.)
Certain forms of income are not considered earnings for the purpose of the EITC. These include
pension and annuity income, income of nonresident aliens not from a U.S. business, income
earned while incarcerated for work in a prison, and TANF benefits paid in exchange for
participation in work experience or community service activities.
Finally, tax filers who claim the foreign earned income exclusion (i.e., they file Form 2555 or
Form 2555EZ with their federal income tax return) are ineligible to claim the EITC.5
2 There is an additional filing status that may claim the EITC—“qualifying widow(er) with dependent child.”
Generally, tax filers may file their tax return as married filing jointly in the year their spouse died. A tax filer may be
eligible to use qualifying widow(er) with dependent child as his or her filing status for two years following the year his
or her spouse died. This filing status entitles the tax filer to use joint return tax rates and the highest standard deduction
amount (if he or she does not itemize deductions). It does not entitle the tax filer to file a joint return. The tax filer
calculates the EITC using the formula for other unmarried tax filing statuses (head of household and single). The
eligibility rules for this filing status can be found on page 10 of IRS Publication 501, available at http://www.irs.gov/
pub/irs-pdf/p501.pdf.
3 The 2013 version of this form can be found at http://www.irs.gov/pub/irs-pdf/f1040sei.pdf.
4 For more information, see http://www.irs.gov/Individuals/Special-EITC-Rules.
5 See Internal Revenue Code (IRC) §32(c)(1)(C) and http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-
(continued...)
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The Earned Income Tax Credit (EITC): An Overview
Residency and Identification Requirements
Under current law, an EITC recipient must be a resident of the United States, unless the recipient
resides in another country because of U.S. military service. To be eligible for the credit, the tax
filer must provide valid Social Security numbers (SSNs) for work purposes6 for themselves,
spouses if married filing jointly, and any qualifying children. (U.S. citizenship is not required to
be eligible for the credit. SSNs do not indicate U.S. citizenship.) Nonresident aliens—those that
do not spend sufficient time in the United States—are generally ineligible for the EITC.7
Qualifying Children
An EITC recipient’s qualifying child must meet three requirements.8 First, the child must have a
specific relationship to the tax filer (son, daughter, step child or foster child,9 brother, sister, half-
brother, half-sister, step brother, step sister, or descendent of such a relative). Second, the child
must share a residence with the taxpayer for more than half the year in the United States.10 Third,
the child must meet certain age requirements; namely, the child must be under the age of 19 (or
age 24, if a full-time student) or be permanently and totally disabled.
As a result of these three requirements, a child may be the qualifying child of more than one tax
filer in the same household. For example, a child who lives with a single parent, grandparent, and
aunt in the same home could be a qualifying child of all three of these individuals. But only one
of these individuals can claim the qualifying child for the EITC, and the others cannot. Indeed, it
appears that under current law, the other individuals are also ineligible to claim the childless
EITC.11 In the case where the tax filers cannot agree on who claims the child, there are “tie-
breaker” rules for who can claim the child for the EITC.12
(...continued)
Credit,-Questions-and-Answers.
6 For more information on Social Security numbers valid for work purposes, see CRS Legal Sidebar WSLG823, Social
Security Number or Individual Taxpayer Identification Number for Tax Credit? That is the Question, by Emily M.
Lanza, Erika K. Lunder, and Kathleen S. Swendiman and CRS Legal Sidebar WSLG723, They’ve Got Your Number:
Who Can Get A Social Security Card, by Kathleen S. Swendiman.
7 For more information, see CRS Report RS21732, Federal Taxation of Aliens Working in the United States, by Erika
K. Lunder and http://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status. In addition, for
the EITC, a nonresident alien may be eligible to claim the credit if they are married to a U.S. citizen or resident alien,
make the election to be treated as a resident alien, and file a joint return.
8 If an individual is the qualifying child for the purposes of the EITC of another person, that individual cannot
themselves claim the EITC. For more information, see http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-
Credit,-Questions-and-Answers.
9 If placed by an authorized agency or court order.
10 Qualifying children who reside with a servicemember who is stationed outside the United States while serving on
extended active duty with the U.S. Armed Forces are considered to reside in the United States for the purposes of the
EITC.
11 Currently, there is no Federal regulation which states that taxpayers with a qualifying child who do not claim that
qualifying child for the EITC are ineligible for the credit. However, the website of the Internal Revenue Service does
state that such individuals are ineligible for the childless EITC. For more information, see http://www.irs.gov/
Individuals/Qualifying-Child-of-More-Than-One-Person.
12 The tie-breaker rules are: (1) if both tax filers are parents of the child, the parent with whom the child resided the
longest during the year claims the child for the EITC; (2) if the child resided with each parent for the same amount of
time during the year, the parent with the highest adjusted gross income (AGI) claims the child for the EITC; (3) if only
(continued...)
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The Earned Income Tax Credit (EITC): An Overview
Age Requirements for EITC Recipients with No Qualifying
Children
If a tax filer has no qualifying children, he or she must be between 25 and 64 years of age to be
eligible for the EITC. There is no age requirement for tax filers with qualifying children.
Investment Income
A tax filer with investment income over a certain dollar amount is ineligible for the EITC. The
statutory limit—$2,200—is adjusted annually for inflation. For 2014, the limit on investment
income is $3,350. Investment income is defined as interest income (including tax-exempt
interest), dividends, net rent, net capital gains, and net passive income. It also includes royalties
that are from sources other than the filer’s ordinary business activities.
Disallowance of the EITC Due to Fraud or Reckless Disregard of
Rules
A tax filer is barred from claiming the EITC for a period of 10 years after the IRS makes a final
determination to reduce or disallow a tax filer’s EITC because that individual made a fraudulent
EITC claim. A tax filer is barred from claiming the EITC for a period of two years after the IRS
determines that the individual made an EITC claim “due to reckless and intentional disregard of
the rules” of the EITC, but that disregard was not found to be fraud.13
Calculating the EITC
The EITC amount is based on formulas that consider earned income, number of qualifying
children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed
percentage (the “credit rate”) of earned income until the credit reaches it maximum amount. The
EITC then remains at its maximum level over a subsequent range of earned income, between the
“earned income amount” and the “phase-out amount threshold.” Finally, the credit gradually
decreases in value to zero at a fixed rate (the “phase-out rate”) for each additional dollar of
earnings or AGI (whichever is greater) above the phase-out amount threshold. The specific values
of these EITC parameters (e.g., credit rate, earned income amount, etc.) vary depending on
several factors, including the number of qualifying children a tax filer has and his or her marital
status, as illustrated in Table 1.
(...continued)
one tax filer is the parent of the child, the tax filer who is the parent claims the child for the EITC; and (4) if neither tax
filer is the parent of the child, the tax filer with the highest AGI claims the child for the EITC.
13 See IRC §32(k).
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The Earned Income Tax Credit (EITC): An Overview
Table 1. EITC Tax Parameters by Marital Status
and Number of Qualifying Children for 2014
Number of Qualifying Children
0
1
2
3 or more
unmarried tax filers (single and head of household filers)
credit rate
7.65%
34%
40%
45%
earned income amount
$6,480
$9,720
$13,650
$13,650
maximum credit amount
$496
$3,305
$5,460
$6,143
phase-out amount threshold
$8,110
$17,830
$17,830
$17,830
phase-out rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$14,590
$38,511
$43,756
$46,997
married tax filers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$6,480
$9,720
$13,650
$13,650
maximum credit amount
$496
$3,305
$5,460
$6,143
phase-out amount threshold
$13,540
$23,260
$23,260
$23,260
phase-out rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$20,020
$43,941
$49,186
$52,427
Source: IRS Revenue Procedure 2013-35 and Internal Revenue Code (IRC) Section 32.
As illustrated in Table 1, the EITC’s earned income amounts, credit rates, phase-out rates, and
maximum credit amounts vary by the number of qualifying children a tax filer has. The EITC
ranges from a maximum credit of $496 for a tax filer without a child to $6,143 for a tax filer with
three or more qualifying children, as illustrated in Figure 1.
Figure 1. Maximum EITC by Number of Qualifying Children: 2014
Source: Congressional Research Service based on IRS Revenue Procedure 2013-35 and Internal Revenue Code
(IRC) Section 32
The phase-out amount threshold varies by both the number of qualifying children a tax filer has
and his or her marital status. The phase-out amount threshold for those who are married filing
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The Earned Income Tax Credit (EITC): An Overview
joint returns is $5,430 greater than for unmarried filing statuses with the same number of
children. (Tax filers who file as married filing separately are ineligible for the EITC.) This higher
phase-out amount threshold for married tax filers reduces (but generally does not eliminate)
potential “marriage penalties” in the EITC whereby the credit for a married couple is less than the
combined credit of two unmarried recipients.
Figure 2 illustrates the EITC amount by earnings level for an unmarried taxpayer with one child
for 2014. It shows the three distinct ranges of EITC for this family:
• Phase-in Range: The EITC increases with earnings from the first dollar of
earnings up to earnings of $9,720. Over this earnings range, the credit equals the
credit rate (34% for a tax filer with one child) times the amount of annual
earnings. The $9,720 threshold is called the earned income amount and is the
earnings level at which the EITC ceases to increase with earned income. The
income interval up to the earned income amount, where the EITC increases with
earnings, is known as the phase-in range.
• Plateau: The EITC remains at its maximum level of $3,305 from the earned
income amount ($9,720) until earnings exceed $17,830. The $3,305 credit
represents the maximum credit for a tax filer with one child in 2014. The income
interval with the EITC fixed at its maximum value represents the plateau on
Figure 2.
• Phase-out Range: Once earnings exceed $17,830, the EITC is reduced for every
additional dollar over that amount. The $17,830 threshold is known as the phase-
out amount threshold for a single taxpayer with one child in 2014. For each
dollar over the phase-out amount threshold, the EITC is reduced by 15.98%. The
15.98% rate is known as the phase-out rate. The income interval from the phase-
out income level until the EITC is completely phased out is known as the phase-
out range.
The EITC is completely phased out (EITC = $0) once the tax filer’s AGI (or earned income,
whichever is greater) reaches $38,511. The earned income amounts and the phase-out amount
thresholds are adjusted each year for inflation.
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The Earned Income Tax Credit (EITC): An Overview
Figure 2. Amount of the EITC for an Unmarried Tax Filer with One Child, 2014
Source: Congressional Research Service, based on information in IRS Revenue Procedure 2013-35 and Internal
Revenue Code Section 32
In practice, EITC claimants use tables published by the IRS to calculate their credit amount. A tax
filer can look up the correct amount of his or her EITC based on income, marital status, and
number of qualifying children. The instructions for the federal income tax form14 show the EITC
amounts in tables by income brackets (in $50 increments).
Income Limits for the EITC
As previously discussed, the amount of the EITC is reduced for each dollar of AGI (or earnings,
if greater) above a certain dollar threshold, referred to as the phase-out amount threshold. That
threshold, combined with the phase-out rate, results in a specific income level (referred to as
“income where credit=0” in Table 1) above which a tax filer is ineligible for the credit. This
income level, where the credit reaches zero, is sometimes referred to as the eligibility threshold.
As illustrated in Table 1, there are eight eligibility thresholds for the EITC depending on the
number of qualifying children a taxpayer has and his or her marital status. The eligibility
thresholds vary every year given that they are based in part on a parameter of the credit—the
phase-out amount threshold—that is explicitly adjusted for inflation. Table 2 shows the EITC
eligibility thresholds for 2014. An EITC claimant’s AGI (or earnings, if higher) must be below
these thresholds for the claimant to qualify for the EITC. In 2014, these thresholds range from
14 The tables can be found, for 2013 returns, beginning on page 59 of the Form 1040 general instructions, at
http://www.irs.gov/pub/irs-pdf/i1040gi.pdf.
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The Earned Income Tax Credit (EITC): An Overview
$14,590 for an unmarried tax filer with no qualifying child to $52,427 for a married tax filer
filing jointly with three or more qualified children.
Table 2 expresses these eligibility thresholds as a percentage of the 2014 poverty guidelines. For
example, the poverty guideline for a family of four in 2014 was $23,850. Families of four with
income at or below this amount are considered poor. The EITC eligibility threshold of $49,186
for a married couple filing jointly with two qualifying children was more than twice (206.2%) the
poverty guideline for a family of that type.
Table 2 also expresses these eligibility thresholds as a percentage of the earnings of one worker
who works a minimum wage job ($7.25 per hour) 40 hours per week, 52 weeks a year ($15,080
annually). For the purposes of the calculations in Table 2, married EITC recipients are assumed
to have the same aggregate annual earnings as unmarried recipients—$15,080. The EITC was
available in 2014 to all families at this earnings level except an unmarried taxpayer with no
children. The EITC was available to families with children who had earnings between 2.5 to 3.5
times the annual earnings from a minimum wage job (255.4% to 347.7% of $15,080).
Table 2. Maximum AGI to Qualify for the EITC, by Number of Qualifying Children
and Filing Status in 2014
Three or More
No Qualifying
One Qualifying
Two Qualifying
Qualifying
Children
Child
Children
Children
In dollars
Unmarried
14,590 38,511 43,756 46,997
Married
Filing
Jointly 20,020 43,941 49,186 52,427
As a percentage of the poverty threshold
Unmarried
125.0 244.8 221.1 197.1a
Married Filing Jointly
127.3 222.0 206.2 187.8b
As a percentage of work at the federal minimum wage, 40 hours per week, 52 weeks per year
Unmarried
96.8 255.4 290.2 311.7
Married Filing Jointly
132.8 291.4 326.2 347.7
Source: Congressional Research Service calculations based on IRS Revenue Procedure 2013-35, Internal
Revenue Code (IRC) Section 32 and the 2014 Poverty Guidelines available at http://aspe.hhs.gov/poverty/
14poverty.cfm.
a. Represents the EITC AGI threshold divided by the poverty guidelines for a family of 4.
b. Represents the EITC AGI threshold divided by the poverty guidelines for a family of 5.
Payment of the EITC
The EITC is provided to individuals and families annually in a lump sum payment after a
taxpayer files a federal income tax return.15 It may be received in one of three ways:
15 Before 2011, any persons with a qualified child eligible for the EITC could elect to receive advance payment of the
(continued...)
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The Earned Income Tax Credit (EITC): An Overview
1. a reduction in federal tax liability;
2. a cash payment from the Treasury if the tax filer has no tax liability, through a tax
refund check; or
3. a combination of reduced federal tax liability and a refund.
The majority (88%) of the aggregate amount of the EITC—$64 billion in 2012—is received as a
refund.16 In other words, $56 billion of the EITC was received as a refund in 2012, while
approximately $8 billion offset tax liabilities.
The EITC is taken against all taxes reported17 on the federal individual income tax return (Form
1040) after all nonrefundable credits have been taken. On the tax form, the EITC can be found in
the payments section after the lines for withholding and estimated tax payments.
The EITC benefits families when they file their income taxes. Thus, payments are generally based
on the prior year’s income, earnings, and family composition. That is, the EITC paid in 2015 is
generally based on earnings, income, and family composition in 2014.
Interaction with Other Tax Provisions
On the tax return, the EITC is calculated after total tax liability and all nonrefundable credits.
Nonrefundable tax credits, which are taken against (reduce) income tax liability, include credits
for education, dependent care, savings, and the nonrefundable portion of the child credit.18 If an
EITC-eligible family has a tax liability and can use one or more of these credits, the total amount
of their EITC will remain unchanged, but how they receive the credit will change. If
nonrefundable tax credits can reduce a family’s tax liability, a greater amount of their EITC will
be received as a refund, and less will offset their tax liability since their tax liability is smaller.
For tax filers whose income places them in the “phase-out range” of the credit, reducing their
income (all else being unchanged) will result in a larger EITC. (As illustrated in Figure 2,
reducing income when a tax filer is in the phase-out range results in the tax filer increasing the
amount of the credit they receive.) A variety of forms of income can be excluded from both AGI
and earned income, reducing a taxpayer’s AGI or earned income for purposes of calculating the
credit. For example, pre-tax contributions to savings accounts for retirement or medical expenses
are not included in either AGI or earned income. Hence, by making these contributions, EITC
claimants whose pre-contribution income places them in the phase-out range of the credit will
(...continued)
credit through the employer’s payroll withholding system by filing an eligibility certificate (Form W-5) with his or her
employer. The option was little used and eliminated by P.L. 111-226.
16 For more information, see IRS Statistics of Income, Table 2.5 at http://www.irs.gov/uac/SOI-Tax-Stats—Individual-
Statistical-Tables-by-Size-of-Adjusted-Gross-Income.
17 These taxes include the regular income tax and alternative income tax, as well as self-employment taxes. Less
common taxes, like unreported Social Security and Medicare taxes and certain taxes on IRAs, are also included. For an
example of these taxes, see lines 56 through 60 on the 2013 IRS Form 1040, http://www.irs.gov/pub/irs-pdf/f1040.pdf.
18 For more information on the nonrefundable (and refundable) portion of the child tax credit, see CRS Report R41873,
The Child Tax Credit: Current Law and Legislative History, by Margot L. Crandall-Hollick.
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The Earned Income Tax Credit (EITC): An Overview
reduce their AGI or earned income for purposes of calculating the EITC and thus receive a
larger credit.19
In contrast, for tax filers whose income places them in the “phase-in range” of the credit, reducing
their income (all else unchanged) will result in a smaller EITC. (As illustrated in Figure 2,
reducing income when a tax filer is in the phase-in range results in the tax filer reducing the
amount of the credit they receive.) Generally, non-taxable income cannot be included in earned
income for purposes of calculating the EITC. However, as previously discussed, servicemembers
may elect to include their nontaxable combat pay as earnings, for purposes of calculating the
EITC. Generally, servicemembers whose income (excluding their combat-pay) places them in the
phase-in range will elect to include their combat pay in earned income for purposes of calculating
the EITC in order to receive a larger credit.
Treatment of the EITC for Need-Tested Benefit Programs
By law,20 the EITC cannot be counted as income in determining eligibility for, or the amount
of, any federally funded public benefit program including Supplemental Nutrition Assistance
Program (SNAP) food assistance, low-income housing, Medicaid, Supplemental Security
Income (SSI), and Temporary Assistance for Needy Families (TANF). An EITC refund that is
saved by the filer does not count against the resource limits of any federally funded public
benefit program for 12 months after the refund is received.
Modifications to the EITC Set to Expire
Two temporary modifications to the EITC were enacted by the American Recovery and
Reinvestment Act of 2009 (ARRA; P.L. 111-5). First, ARRA enacted a temporary larger credit for
families with three or more children by creating a new higher credit rate of 45% (previously,
these tax filers were eligible for a credit rate of 40%). Second, ARRA expanded marriage penalty
relief by increasing the earnings level at which the credit phased out for married tax filers in
comparison to unmarried tax filers with the same number of children. Before ARRA, the EITC
for married tax filers would begin to phase out for earnings $3,000 (adjusted for inflation) greater
than the level for unmarried recipients with the same number of children. ARRA increased this
differential to $5,000 (adjusted for inflation). In 2014, this marriage penalty relief was equal to
$5,430.
These two changes were originally scheduled to be in effect only for 2009 and 2010. The Tax
Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312)
extended these ARRA provisions for two years (2011 and 2012). The American Taxpayer Relief
Act (ATRA; P.L. 112-240) extended the ARRA provisions for five more years (2013-2017).
Hence, under current law, beginning in 2018, the larger credit for families with three or more
19 In contrast, if the pre-contribution income places them in the plateau or the phase-in range, decreasing their earned
income by making certain pre-tax savings contributions may either have no impact or result in a smaller credit.
20 The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) included a
provision which made tax refunds, including those resulting from the EITC, disregarded in the administration of federal
programs and federally assisted programs. At the end of 2012, this provision was made permanent by the American
Taxpayer Relief Act of 2012 (P.L. 112-240).
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
children will expire and the marriage penalty relief will be reduced from $5,000 (adjusted for
inflation) to $3,000 (adjusted for inflation). (Families with three or more children can claim the
credit for families with two or more children beginning in 2018.)
Participation and Benefits
The EITC was first enacted in 1975 as a temporary measure meant to encourage economic
growth in the face of the 1974 recession and rising food and energy prices. It was also originally
intended to “assist in encouraging people to obtain employment, reducing the unemployment rate,
and reducing the welfare rolls.”21 Over time the list of EITC objectives has grown to include
poverty reduction. Today the EITC is the largest need-tested, cash benefits anti-poverty program.
This section first provides a historical overview of the growth of the EITC from 1975 to 2012; it
then examines information on EITC participation for 2012.
Trends in Participation and EITC Benefits
When originally enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a
temporary refundable tax credit in effect for 1975. For that year, 6.2 million tax filers claimed the
EITC and the total EITC amount claimed was $1.25 billion (in constant 2012 dollars, this equals
$5.3 billion). The credit was extended several more times on a temporary basis and made
permanent by the Revenue Act of 1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514),
1990 (P.L. 101-508), 1993 (P.L. 103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the
amount of the credit by changing the credit formula.
Before 1990, the credit amount was calculated as a percentage of earnings (“the credit rate”) up
until the earned income amount. The credit then remained at its maximum level before gradually
decreasing in value as earnings increased. Legislative changes to the credit made during this time
generally increased the amount of the credit in a variety of ways including increasing the credit
rate, increasing the earned income amount, increasing the phase-out amount threshold, and
decreasing the phase-out rate. Nonetheless, the credit amount depended on earned income.
Beginning in 1990 and more substantially in 1993, the credit formula was revised such that the
credit amount varied based on earnings and, to a certain extent, the number of qualifying children.
This essentially increased the credit by family size. In addition, for the first time in 1993,
Congress made workers without qualifying children eligible for the EITC, although the credit was
smaller than the credit for claimants with qualifying children.
In 2001, the credit formula was revised again so that it also varied based in part on marital status.
As a result of this change, often referred to as “marriage penalty relief,” certain married tax filers
would receive a larger credit than unmarried tax filers with the same number of children. In 2009,
the marriage penalty relief was expanded further and a larger credit was created for families with
three or more children. These 2009 changes were extended several times (most recently by P.L.
112-240) and are currently set to expire at the end of 2017.
21 U.S. Congress, Senate Committee on Finance, Tax Reduction Act of 1975, Report to Accompany H.R. 2166, 94th
Cong., 1st sess., March 17, 1975, S. Report 94-36, p. 33.
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The Earned Income Tax Credit (EITC): An Overview
Figure 3 shows the number of tax filers claiming the EITC from 1975 to 2012. Figure 4 shows
the amount of the EITC claimed on these returns, with dollar amounts adjusted for inflation to
represent 2012 dollars. The figures show the effects of the legislative expansions of the EITC,
with the credit experiencing growth in the late 1980s through the mid-1990s and then again in the
2000s. As shown on Figure 4, throughout the history of the EITC, most credits have been paid in
the form of refunds, with a relatively small share of the EITC reducing regular federal income tax
liability.
Figure 3. Number of Tax Filers Claiming the EITC: 1975 to 2012
Source: Congressional Research Service. For pre-2003 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp.13-41. For 2003 and later data,
Internal Revenue Service, Total File, United States, Individual Income and Tax Data, by State and Size of Adjusted Gross
Income, 2003 through 2012, expanded unpublished version, Table 2.5.
Note: For a tabular display of this information, see Table A-1.
Figure 4. EITC Claimed on Federal Income Tax Returns: 1975-2012
Source: Congressional Research Service. For pre-2003 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp.13-41. For 2003 and later data,
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Internal Revenue Service, Total File, United States, Individual Income and Tax Data, by State and Size of Adjusted Gross
Income, 2003 through 2012, expanded unpublished version, Table 2.5.
Notes: Constant 2012 dol ars were computed using the Consumer Price Index for al Urban Consumers (CPI-
U). For a tabular display of this information, see Table A-1.
The growth in the total amount of EITC claimed in the late 1980s to the mid-1990s was due to
not only increases in participation, but also in the average credit received by tax filers. Figure 5
shows the average EITC claimed for 1975 to 2012, in inflation-adjusted (2012) dollars. Before
the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation, and the
average credit lost value each year. However, the 1986 act increased the monetary parameters of
the credit for prior inflation and adjusted the threshold amounts and maximum credits annually
for inflation in future years. The credit formula was also revised in 1990 and then again in 1993
such that the amount of the credit depended to a certain extent on family size. These changes
resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the
average credit has largely maintained its real value. However, increases in the average credit
amount in 2001 and 2009 were likely due to legislative changes that included larger credits for
some married claimants and for families with three or more children.22
Figure 5. Average EITC Claimed: 1975 to 2012
Source: Congressional Research Service. For pre-2003 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp.13-41. For 2003 and later data,
Internal Revenue Service, Total File, United States, Individual Income and Tax Data, by State and Size of Adjusted Gross
Income, 2003 through 2012, expanded unpublished version, Table 2.5.
Notes: Constant 2012 dol ars were computed using the Consumer Price Index for al Urban Consumers (CPI-
U). For a tabular display of this information, see Table A-1.
Participation and EITC Amounts Claimed for 2012
For 2012, $64.1 billion of the EITC was claimed on 27.8 million tax returns.
22 The increase in the value of the credit in 2009 is likely due to the changes made by the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5) which expanded the credit for families with three or more children and
increased marriage penalty relief.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Number of Qualifying Children
Most tax filers claiming the EITC, and those who received the most EITC dollars, were families
with children. Figure 6 shows total EITC dollars claimed for 2012 by number of qualifying
children. For 2012, 3% of all EITC dollars were claimed by tax filers with no qualifying children
and 97% were claimed by tax filers with qualifying children. Of this 97%, 36% were claimed by
tax filers with one qualifying child, 40% were claimed by tax filers with two qualifying children,
and 21% were claimed by tax filers with three or more qualifying children.
Figure 6. Total EITC Dollars Claimed for 2012, by Number of Qualifying Children
Dollars in Billions, Total EITC Claimed = $64.1 Bil ion
Source: Congressional Research Service, based on data from the U.S. Department of Treasury, Internal
Revenue Service, SOI Tax Stats - Individual Income Tax Returns Publication 1304, Table 2.5.
Though childless tax filers claimed 3% of all EITC dollars for 2012, they accounted for close to
one-fourth of all tax filers that claimed the EITC. Thus, their small share of total EITC dollars
reflects, in part, the lower credit amount available to childless filers.
Figure 7 shows the number of returns claiming the EITC for 2012 by number of qualifying
children. Figure 8 shows the average EITC claimed for 2012 by number of qualifying children,
with the overall average amount of the EITC claimed being $2,303. The average EITC for 2012
increased with the number of qualifying children a tax filer claimed:
• The EITC was claimed by 6.9 million tax filers with no qualifying children, with
an average claim of $267.
• The EITC was claimed by 10.2 million filers with one qualifying child, with an
average claim of $2,245.
• The EITC was claimed by 7.3 million filers with two qualifying children, with an
average claim of $3,547.
• The EITC was claimed by 3.5 million filers with three or more qualifying
children, with an average claim of $3,872.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Figure 7. Number of Tax Returns with EITC Claims for 2012,
by Number of Qualifying Children
Number in Millions, Total Number of Returns Claiming the EITC = 27.8 million
Source: Congressional Research Service, based on data from the U.S. Department of Treasury, Internal
Revenue Services, SOI Tax Stats - Individual Income Tax Returns Publication 1304, Table 2.5.
Notes: Detail does not add to total because of rounding. For detail on returns claiming the EITC by AGI and
number of qualifying children, see Table A-2.
Figure 8. Average EITC Claimed by Tax Filers in 2012,
by Number of Qualifying Children
Source: Congressional Research Service, based on data from the U.S. Department of Treasury, Internal
Revenue Services, SOI Tax Stats - Individual Income Tax Returns Publication 1304, Table 2.5.
Notes: For detail on returns claiming the EITC by AGI and number of qualifying children, see Table A-2.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Income Level
Though the EITC is targeted toward lower-income earners, tax filers with children may receive
the EITC even with income well above the poverty level. (The 2012 federal poverty level for a
family of three was $19,090 in 2012.) However, the largest EITC benefits are focused on low-
income earners near the poverty line, with those with greater earnings receiving reduced benefits.
Figure 9 shows the number of tax returns with EITC claims in 2012 by adjusted gross income
level. Figure 9 shows that the most typical (modal) EITC tax return had an AGI between $10,000
and $14,999, with 5.9 million returns including an EITC in that income range for 2012. For that
year, close to half of all returns with EITC claims had AGIs below $14,999. This AGI is
equivalent to earnings less than the $15,080 earned by a full-time (40 hour per week) full-year
(52 weeks per year) worker earning the federal minimum wage ($7.25 per hour).
Figure 9 also shows the average EITC claimed by AGI category. Average EITC benefits first
increase with AGI, then decline. This outcome reflects the formula for determining the EITC,
which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as
it is phased out above a certain income threshold (see Table 1 and Figure 2). It also reflects a
difference in the mix of family types claiming the EITC in the various AGI categories. For
example, two-thirds of all filers claiming the EITC with AGIs of less than $5,000 had no
qualifying children. All those claiming the EITC at AGIs above $20,000 in 2012 had qualifying
children, and hence were eligible for a larger maximum EITC benefit than filers without children.
For detail on returns claiming the EITC by AGI and number of qualifying children, see Table A-
2.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Figure 9. Number of Returns Claiming the EITC and Average EITC Claimed for
2012, by Adjusted Gross Income
Numbers in Millions and Dollars in 2012 $
Source: Congressional Research Service, based on data from the U.S. Department of Treasury, Internal
Revenue Services, SOI Tax Stats - Individual Income Tax Returns Publication 1304, Table 2.5.
Notes: For detail on returns claiming the EITC by AGI and number of qualifying children, see Table A-2.
Filing and Marital Status
The Internal Revenue Service does not provide data on EITC dollars claimed by filing status. The
Tax Policy Center (TPC), however, projects that in 2015, 70% of all EITC dollars will be claimed
by unmarried tax filers (head of household and single filing statuses), with most (60% of all EITC
dollars) claimed by those filing as heads of household. (The TPC projections are likely similar to
the actual amounts of the EITC claimed by filing status in 2013 and 2014, given that they are
based on the same credit formula.) Figure 10 shows projections for EITC dollars claimed by
filing status for 2015.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Figure 10. Estimate of EITC Dollars Claimed by Marital Status, 2015
Dollars in Billions
Source: Congressional Research Service, based on estimates from the Urban-Brookings Institution Tax Policy
Center Table T13-0274, available at http://www.taxpolicycenter.org/numbers/index.cfm. Estimates are for tax
year 2015.
Region
In 2012, the EITC was claimed on 19.2% of all tax returns. However, the rate at which the EITC
is claimed by tax filers varies considerably by state. In 2012, the state with the highest percentage
of returns claiming the EITC was Mississippi, with the credit claimed on 32.4% of all returns. In
contrast, the EITC was claimed on 12.2% of all returns in New Hampshire that year.
Figure 11 provides a map showing the percentage of all tax returns claiming the EITC by state. In
addition to considerable state variation, the map shows that there is a regional pattern to EITC
receipt. A greater share of returns filed in certain southern states claimed the EITC than returns in
other regions of the country. The EITC was claimed on the smallest percentage of returns in New
England as well as some states in the northern Midwest.
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The Earned Income Tax Credit (EITC): An Overview
Figure 11. Percentage of Tax Returns Claiming the EITC by State, 2012
Source: Congressional Research Service, based on data from the U.S. Internal Revenue Service.
Note: For detail on EITC returns by state, see Table A-3.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Appendix. Additional Tables
Table A-1. EITC Tax Filers and Dollars Claimed: 1975-2012
In Millions of Constant
Constant
In Millions of Nominal $ Nominal $
2012 $
2012 $
Tax Filers
Claiming
the EITC
Total
Refunded
Average
Total
Refunded
Average
Year
(Millions)
EITC
EITC
EITC
EITC
EITC
EITC
1975 6.215
$1,250
$900
$201
$5,334
$3,841
$858
1976 6.473
1,295
890 200
5,225
3,591
807
1977 5.627
1,127
880 200
4,270
3,334
758
1978 5.192
1,048
801 202
3,690
2,821
711
1979 7.135
2,052
1,395
288
6,489
4,412
911
1980 6.954
1,986
1,370
286
5,534
3,817
797
1981 6.717
1,912
1,278
285
4,829
3,228
720
1982 6.395
1,775
1,222
278
4,223
2,907
661
1983 7.368
1,795
1,289
244
4,138
2,971
562
1984 6.376
1,638
1,162
257
3,620
2,568
568
1985 7.432
2,088
1,499
281
4,455
3,199
600
1986 7.156
2,009
1,479
281
4,209
3,098
589
1987 8.738
3,391
2,930
388
6,853
5,922
784
1988 11.148
5,896
4,257 529
11,443
8,262
1,027
1989 11.696
6,595
4,636 564
12,211
8,584
1,044
1990 12.542
7,542
5,266 601
13,249
9,251
1,056
1991 13.665
11,105
8,183
813
18,720
13,794
1,370
1992 14.097
13,028
9,959
924
21,320
16,297
1,512
1993
15.117 15,537 12,028 1,028 24,687 19,111 1,633
1994
19.017 21,105 16,598 1,110 32,696 25,714 1,720
1995
19.334 25,956 20,829 1,343 39,103 31,379 2,023
1996
19.464 28,825 23,157 1,481 42,180 33,886 2,167
1997
19.391 30,389 24,396 1,567 43,471 34,898 2,242
1998
20.273 32,340 27,175 1,595 45,553 38,277 2,247
1999
19.259 31,901 27,604 1,656 43,963 38,041 2,282
2000
19.277 32,296 27,803 1,675 43,060 37,070 2,233
2001
19.593 35,784 29,043 1,826 46,391 37,652 2,367
2002
21.574 37,786 33,258 1,751 48,224 42,445 2,235
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
In Millions of Constant
Constant
In Millions of Nominal $ Nominal $
2012 $
2012 $
Tax Filers
Claiming
the EITC
Total
Refunded
Average
Total
Refunded
Average
Year
(Millions)
EITC
EITC
EITC
EITC
EITC
EITC
2003
22.112 39,186 34,508 1,772 48,896 43,059 2,211
2004
22.270 40,024 35,299 1,797 48,646 42,903 2,184
2005
22.752 42,410 37,465 1,864 49,857 44,044 2,191
2006
23.042 44,388 39,072 1,926 50,552 44,498 2,193
2007
24.584 48,540 42,508 1,974 53,749 47,070 2,186
2008
24.756 50,669 44,260 2,047 54,032 47,198 2,183
2009
27.041 59,240 53,985 2,191 63,398 57,774 2,345
2010
27.368 59,562 54,256 2,176 62,714 57,127 2,291
2011
27.912 62,906 55,350 2,254 64,208 56,495 2,301
2012
27.848 64,129 56,190 2,303 64,129 56,190 2,303
Source: Congressional Research Service. For pre-2003 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp.13-41. For 2003 and later data,
Internal Revenue Service, Total File, United States, Individual Income and Tax Data, by State and Size of Adjusted Gross
Income, 2003 through 2012, expanded unpublished version, Table 2.5.
Notes: Constant 2012 dol ars were computed using the Consumer Price Index for al Urban Consumers (CPI-
U).
Table A-2. Average EITC, Number of Returns with EITC Claimed, and Total EITC
Benefits for 2012, by Adjusted Gross Income
Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI Totals
Children
Child
Children
Children
Average Credit
Less than $5,000
$576
$213
$1,189
$1,530
$1,921
$5,000 to $9,999
1,556
391
2,696
3,015
3,364
$10,000 to $14,999
2,600
177
3,061
4,816
5,339
$15,000 to $19,999
3,949
153
2,983
4,999
5,695
$20,000 to $24,999
3,480
0
2,400
4,280
5,150
$25,000 to $29,999
2,676
0
1,681
3,345
4,160
$30,000 to $34,999
1,818
0
953
2,378
3,168
$35,000 to $39,999
1,289
0
461
1,421
2,155
$40,000 to $44,999
884
0
151
790
1,291
$45,000 and higher
413
0
0
233
541
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI Totals
Children
Child
Children
Children
Totals
2,303
267
2,245
3,547
3,872
Total Returns with EITC
Less than $5,000
2,719,962
1,861,313
525,562
236,562
96,525
$5,000 to $9,999
5,034,896
2,619,274
1,704,317
514,144
197,161
$10,000 to $14,999
5,857,902
2,141,826
1,880,398
1,348,810
486,868
$15,000 to $19,999
3,948,005
252,887
1,654,402
1,439,950
600,766
$20,000 to $24,999
2,974,327
0
1,493,992
987,724
492,611
$25,000 to $29,999
2,568,970
0
1,239,825
905,408
423,737
$30,000 to $34,999
2,155,201
0
1,045,183
751,737
358,281
$35,000 to $39,999
1,504,188
0
500,027
619,798
384,363
$40,000 to $44,999
795,285
0
125,419
360,640
309,226
$45,000 and higher
289,528
0
0
120,318
169,210
Totals
27,848,264
6,873,296
10,169,124
7,285,091
3,518,749
Total EITC Claimed ($ in thousands)
Less than $5,000
1,567,791
395,924
624,644
361,832
185,391
$5,000 to $9,999
7,831,839
1,022,956
4,595,499
1,550,146
663,238
$10,000 to $14,999
15,231,655
379,584
5,756,226
6,496,441
2,599,404
$15,000 to $19,999
15,592,358
38,705
4,934,283
7,197,775
3,421,595
$20,000 to $24,999
10,349,383
0
3,585,622
4,227,050
2,536,711
$25,000 to $29,999
6,874,789
0
2,083,753
3,028,379
1,762,657
$30,000 to $34,999
3,918,956
0
996,354
1,787,582
1,135,020
$35,000 to $39,999
1,939,214
0
230,292
880,532
828,390
$40,000 to $44,999
703,080
0
18,899
285,023
399,158
$45,000 and higher
119,563
0
0
28,013
91,550
Totals
64,128,627
1,837,168
22,825,570
25,842,774
13,623,115
Source: Congressional Research Service, based on data from the U.S. Department of the Treasury, Internal
Revenue Services, SOI Tax Stats - Individual Income Tax Returns Publication 1304, Table 2.5.
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Table A-3. Total EITC Returns and Amounts for 2012, by State
Percentage
of Total
Total EITC
Returns
Returns
Claimed
Percentage
Total
with EITC
with EITC
($ in
Average
of EITC
State or Area
Returns
Claimed
Claimed
thousands)
EITC
Refunded
U.S. Totala 145,025,450
27,788,100
19.2%
$64,221,884
$2,311
87.8%
Alabama
2,050,890
537,470 26.2 1,417,969
2,638 90.0
Alaska 363,090
51,800
14.3
101,907
1,967
90.5
Arizona
2,761,490
582,750 21.1 1,409,991
2,420 89.1
Arkansas
1,219,480
312,090 25.6 764,025 2,448 90.0
California 16,909,110
3,209,680
19.0
7,289,949
2,271
84.9
Colorado
2,450,150
372,800 15.2 775,244 2,080 87.7
Connecticut
1,741,480
222,010 12.7 453,493 2,043 87.7
Delaware 434,150
74,540
17.2
165,527
2,221
91.1
District of Columbia
327,730
55,410
16.9
122,917
2,218
87.0
Florida 9,226,420
2,160,410
23.4
5,099,789
2,361
86.7
Georgia 4,335,320
1,124,330
25.9
2,900,740
2,580
88.1
Hawai
665,320 114,580 17.2 240,483 2,099 90.3
Idaho
679,220 140,040 20.6 308,166 2,201 89.0
Illinois 6,077,090
1,048,420
17.3
2,451,585
2,338
86.8
Indiana
3,029,600
564,020 18.6 1,273,387
2,258 89.8
Iowa
1,426,710
216,730 15.2 452,305 2,087 89.4
Kansas
1,323,740
221,240 16.7 487,372 2,203 90.5
Kentucky
1,879,100
415,170 22.1 940,851 2,266 89.2
Louisiana
2,011,770
541,930 26.9 1,422,469
2,625 89.5
Maine
631,380 105,710 16.7 205,791 1,947 86.6
Maryland
2,860,930
425,080 14.9 930,605 2,189 86.6
Massachusetts 3,264,490
413,580 12.7 809,976 1,958 88.0
Michigan
4,631,040
846,240 18.3 1,942,605
2,296 87.4
Minnesota
2,619,920
354,700 13.5 718,338 2,025 88.5
Mississippi
1,250,140
405,570 32.4 1,096,524
2,704 90.4
Missouri
2,728,430
536,500 19.7 1,222,335
2,278 89.7
Montana 485,250
85,000
17.5
169,861
1,998
88.6
Nebraska
871,940 139,270 16.0 303,218 2,177 89.8
Nevada
1,289,360
244,230 18.9 553,790 2,267 88.8
New Hampshire
679,910
82,990
12.2
153,548
1,850
86.7
New
Jersey
4,307,560
599,320 13.9 1,302,425
2,173 86.4
New
Mexico
905,340 222,270 24.6 511,475 2,301 90.9
Congressional Research Service
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The Earned Income Tax Credit (EITC): An Overview
Percentage
of Total
Total EITC
Returns
Returns
Claimed
Percentage
Total
with EITC
with EITC
($ in
Average
of EITC
State or Area
Returns
Claimed
Claimed
thousands)
EITC
Refunded
New York
9,363,750
1,797,030
19.2
3,989,000
2,220
85.1
North
Carolina 4,287,590
950,320 22.2 2,249,232
2,367 89.3
North Dakota
353,830
44,410
12.6
87,796
1,977
89.9
Ohio
5,507,560
982,370 17.8 2,236,340
2,276 89.2
Oklahoma
1,618,460
350,380 21.6 822,032 2,346 89.4
Oregon
1,768,810
292,600 16.5 586,432 2,004 88.7
Pennsylvania
6,134,120
942,080 15.4 1,976,028
2,098 89.7
Rhode Island
512,930
84,090
16.4
181,446
2,158
88.4
South
Carolina 2,077,310
507,210 24.4 1,222,899
2,411 90.1
South Dakota
414,950
67,060
16.2
138,866
2,071
90.8
Tennessee
2,882,040
673,000 23.4 1,612,235
2,396 87.9
Texas 11,573,440
2,702,180
23.3
6,923,938
2,562
87.4
Utah
1,174,090
202,600 17.3 456,422 2,253 89.6
Vermont 321,250
47,360
14.7
85,885
1,813
85.4
Virginia
3,811,070
624,030 16.4 1,373,900
2,202 89.0
Washington
3,244,400
464,370 14.3 957,018 2,061 89.2
West
Virginia
788,490 159,830 20.3 341,134 2,134 91.5
Wisconsin
2,778,100
400,280 14.4 833,561 2,082 89.2
Wyoming 301,660
41,380
13.7
81,641
1,973
90.3
Other Areas
674,050
29,660
4.4
67,421
2,273
96.8
Source: Congressional Research Service, based on data from the U.S. Department of the Treasury, Internal
Revenue Service (IRS), Individual Income and Tax Data, by State and Size of Adjusted Gross Income.
a. Totals in this table differ slightly from total shown in Table A-2. While the figures in Table A-2 and
Table A-3 are both based on data from the IRS, thee data in Table A-3 includes “substitutes for returns”
in which the IRS constructs tax returns for certain non-filers.
Author Contact Information
Gene Falk
Margot L. Crandall-Hollick
Specialist in Social Policy
Analyst in Public Finance
gfalk@crs.loc.gov, 7-7344
mcrandallhollick@crs.loc.gov, 7-7582
Acknowledgments
CRS graphics specialist Jamie Hutchinson created the figures in this report.
Congressional Research Service
24